Stocks on Bursa Malaysia ended sharply lower yesterday amid persistent selling of heavyweight stocks such as Maybank. Investors took the cue from Wall Street's plunge last week and the weak sentiment in regional markets, and continuing concerns over the global economy plagued markets in Asia. The FBM KLCI closed 34.14 points or 2.50% lower at 1,331.80 after opening 8.20 points easier at 1,357.74. It was the third worst performer among major indices in Asian markets after the Jakarta Composite Index and South Korea's Kospi. Losers outnumbered gainers by 842 to 84 while 143 counters were unchanged. Turnover increased to 1.046 billion shares worth RM1.782 billion from 948.313 million shares worth RM1.846 billion on Friday.
The FBM KLCI opened with a down gap of 8.20 points at 1,357.74 and slid lower on persistent selling pressure. The key index hit the intra-day low of 1,310.53 soon after the market opened in the afternoon session, losing as much as 55.41 points at its worst before bargain hunting activity lifted it to close off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick with a long lower shadow which indicates the bears were in control. As expected, the barometer slid rapidly towards the targets of 1,318 and 1,300 after it broke the critical support of 1,350, and there is still a strong likelihood that the key index will visit the critical 1,300 key psychological support level.
MACD continued to slide deeper into the negative zone, indicating an increased of the bearish momentum. RSI (14) plunged lower to 17.9, indicating a deeply oversold situation, and a rebound might be expected soon, as in the past whenever the RSI comes below the 20-point level a strong rebound took place. Stochastic was almost flat at 7.4, and continued to remain in the oversold zone. Readings from the indicators showed a very bearish and weak FBM KLCI. However, with the oscillators flashing an oversold situation, a rebound might be expected.
The trend remained down and is very bearish. As there are no bottoming signs observed yet, the FBM KLCI is likely to continue with its current downtrend with 1,300 as the next target level.
Immediate downside support zone is at 1,318 to 1,300, while the immediate overhead resistance zone is at 1,350 to 1,378. Overnight, the Dow rose +272.38 points or +2.53% to close at 11,043.86. Today, the FBM KLCI is likely to trade within a range of 1,285 to 1,381.
This week's expected range: 1263 – 1461
Today’s expected range: 1285 – 1381
Resistance: 1350, 1358, 1381
Support: 1285, 1300, 1308